Employers received significant relief in July when the U.S. Court of Appeals for the First Circuit refused to keep the Administration’s $100,000 H-1B payment requirement in effect. But a new development means the fight over six-figure H-1B costs is far from over: DHS has now proposed a separate $103,265 fee for new cap-subject H-1B petitions.

The important distinction is that the original $100,000 payment is not currently being collected, while the new $103,265 amount is only a proposed rule. Employers do not have to pay the proposed fee today.

How Did We Get Here?

The original $100,000 requirement originated with a September 2025 presidential proclamation. The policy required a $100,000 payment in connection with certain H-1B petitions, creating a major financial barrier for U.S. employers seeking to bring new H-1B workers to the United States.

A coalition of 20 states challenged the policy in federal court in State of California v. Mullin.

On June 8, 2026, Judge Leo T. Sorokin of the U.S. District Court for the District of Massachusetts vacated the policy. The court concluded, among other things, that the $100,000 payment functioned as a tax rather than an ordinary immigration processing fee and that neither the President nor the agencies had statutory authority to impose it. The court also identified problems with the government’s implementation of the policy under the Administrative Procedure Act.

First Circuit Refuses to Keep the $100,000 Fee in Effect

The federal government appealed and sought to keep the $100,000 requirement in place while the appeal proceeded. After a temporary administrative stay created several weeks of uncertainty, the First Circuit denied the government’s motion for a stay pending appeal on July 24, 2026.

The appeals court concluded that the government had not demonstrated the required likelihood of success on appeal and determined that continuing the stay would substantially harm the states challenging the policy. The temporary stay therefore dissolved, and the June 8 order vacating the $100,000 requirement became operative again.

USCIS subsequently confirmed that it would comply with the court order and would not collect the $100,000 payment while the order remains in effect. The underlying appeal, however, remains pending.

Now DHS Is Trying a Different Approach: A $103,265 Fee

On August 25, 2026, DHS is scheduled to publish a new Notice of Proposed Rulemaking that would establish an additional $103,265 fee for all H-1B cap-subject petitions, including petitions eligible for the U.S. advanced-degree exemption. The proposed fee would be payable when the H-1B petition is filed and would be in addition to all other applicable government filing fees.

This proposal is legally distinct from the earlier $100,000 presidential-proclamation payment. This time, DHS is proceeding through notice-and-comment rulemaking and principally relies on INA § 286(m), 8 U.S.C. § 1356(m)—a statute enacted by Congress that authorizes the government to set fees for adjudication and naturalization services at levels intended to recover the full costs of providing those services.

DHS proposes to use the new fee as a dedicated revenue mechanism to recover costs across the broader federal immigration system, including activities carried out by USCIS, CBP, ICE, the immigration courts, the Department of State, and the Department of Labor. DHS calculates the $103,265 amount by dividing approximately $8.777 billion in identified costs by a projected 85,000 fee-paying cap-subject H-1B petitions.

Who Would Have to Pay the Proposed Fee?

The proposed $103,265 fee is targeted specifically at cap-subject H-1B petitions. That generally means new H-1B cases requiring a number under the regular 65,000 cap or the 20,000 U.S. advanced-degree exemption—for example, many F-1 students moving from OPT or STEM OPT into their first cap-subject H-1B.

Importantly, the proposal does not apply to all H-1B filings. DHS states that the fee would apply only to cap-subject petitions. Ordinary extensions, changes of employer, amendments, and other petitions for workers who have already been counted against the cap generally would not be subject to this new fee, assuming the worker remains exempt from being counted again. True cap-exempt filings, such as qualifying petitions by universities and certain research organizations, would also fall outside the proposed fee.

The New Proposal Will Likely Face Legal Scrutiny

The new proposal attempts to address a key weakness of the earlier policy by relying on an existing congressional fee-setting statute and using the formal notice-and-comment process. Nevertheless, the extraordinary size and structure of the proposed fee are likely to generate substantial legal challenges if DHS finalizes it.

A central question will be whether INA § 286(m) permits DHS to use a fee imposed on approximately 85,000 cap-subject H-1B petitions to recover billions of dollars in costs associated with the broader immigration system. Congress clearly authorized immigration fee-setting, but challengers may argue that DHS has stretched that authority beyond a permissible user fee by requiring one relatively narrow group of employers to finance activities across multiple federal agencies.

The proposal may also face challenges under the Administrative Procedure Act concerning DHS’s decision to place these costs specifically on cap-subject H-1B employers rather than distributing them more broadly among immigration benefit requestors.

What Does This Mean for Employers Right Now?

For now, neither six-figure charge should be treated as a current filing requirement. The original $100,000 proclamation payment remains blocked under the Massachusetts court order, and USCIS is not currently collecting it. The new $103,265 fee is only a proposal and must proceed through the federal rulemaking process before it could take effect.

The proposed rule provides for a 30-day public comment period following publication. DHS must consider the comments before issuing any final rule, and the final version could change. If DHS finalizes the proposal substantially as written, litigation seeking to block the fee is highly likely.

Bottom Line

The Administration’s first attempt to impose a six-figure H-1B payment is currently blocked, but DHS is now pursuing a second—and legally different—path. The proposed $103,265 fee would primarily affect employers sponsoring workers for new cap-subject H-1Bs, not ordinary extensions or transfers for workers who have already been counted against the cap.

Employers do not need to pay the proposed $103,265 fee today. However, businesses that rely on the H-1B cap—particularly those hiring international students from OPT or STEM OPT—should closely monitor the rulemaking because, if finalized and allowed to take effect, the proposal would fundamentally change the economics of H-1B sponsorship.